Lawyers Clash in Dispute over Fees, by Andrew Wolfson, The Courier-Journal, May 10, 2007

Lawyers Clash in Dispute over Fees

By Andrew Wolfson
The Courier-Journal
May 10, 2007

http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20070510/NEWS01/705100454/1008

Burlington, Ky. — Prominent Cincinnati attorney Stan Chesley said he wanted to file the Diocese of Covington priest-abuse case in Boone County because "we have a real friendly judge there," a lawyer testified this week.

"He winked at me" and said "we need to file this in Boone County," testified Covington lawyer Barbara Bonar, who is suing Chesley in a dispute over attorneys fees in the $84.5 million case.

"He said we already have hired a trial consultant, and he is real friendly with the judge," Bonar said, describing a conversation she claimed to have had with Chesley in January 2003. "And he winked at me again."

In an interview, Chesley, the lead counsel in the Diocese of Covington case, denied Bonar's allegations, as did several other witnesses called yesterday in the second day of a two-day trial in Boone Circuit Court.

Stan Chesley denied charges.

Senior Judge Robert McGinnis is expected to rule tomorrow after more testimony.

Under cross-examination, Bonar was shown to have exaggerated her role in the case and to have never mentioned her concerns about the trial consultant, Mark Modlin, until she brought it up in her fee dispute.

Bonar claimed to have withdrawn from the abuse case because of those concerns, but in her motion to get out she cited only an unspecified conflict of interest.

The testimony casts additional light on assertions initially made by the diocese in 2003 that then-Boone Circuit Judge Joseph Bamberger declared the case a class action because of his close friendship with Modlin, whom Chesley's firm had hired.

Bamberger's ruling, the first ever in the United States in a priest-abuse case, was vehemently opposed by the diocese and supported by plaintiffs' counsel because it allowed hundreds of people to bring their claims anonymously and to settle the cases at the same time.

The principal players in the case — Chesley, Modlin and Bamberger — also figured in the $200 million settlement of Kentucky's fen-phen diet-drug case. A judge has found that three other lawyers — but not Chesley — defrauded their clients. Bamberger resigned rather than face possible removal for his conduct in the case.

Bonar, who was briefly co-counsel for the class in the priest-abuse case, testified that Chesley's partner Robert Steinberg told her in August 2003 that the Chesley firm had to turn down an early $3 million settlement offer from the diocese because it already had paid $400,000 in expenses to Modlin as a fee "to get the class certified."

"I was horrified," Bonar testified. "I felt that there had been a fraud on the court."

Carrie Huff, a Chicago lawyer who is lead counsel for the diocese, filed an affidavit seeking to disqualify Bamberger from the case in 2003, saying Modlin bragged about his close friendship and that outsiders never do well in Boone Circuit Court.

Bamberger retired from the bench before Chief Justice Joseph Lambert could rule on the diocese's motion to disqualify him.

Modlin testified yesterday that he never denied he was a friend of Bamberger but also never told anyone that he could influence the judge's decisions. He also denied telling Huff that outsiders don't fare well in Boone.

Also testifying yesterday, Steinberg denied Bonar's assertions about the $400,000 payment, as did another co-counsel for the class, attorney Mike O'Hara, who was present when Bonar said the comment was made.

Huff testified that the diocese never made the settlement offer described by Bonar, and Chesley testified he hasn't paid Modlin anything yet, and that when he is paid, it will only be about $53,000.

The Diocese of Covington case was settled in 2005 on behalf of more than 350 victims. Payments are just beginning now.

The class counsel team headed by Chesley and Steinberg was awarded about $18.3 million. In her suit, Bonar alleges that Chesley initially promised orally to "partner" 50-50 with her, then later agreed in writing to pay her a share of the fee worth about $1 million.

She hasn't been paid anything through the class action because Chesley and the other lawyers contend she didn't do any work for it; they say it's unethical to split a fee with a lawyer who does no work. (Bonar was paid $2 million for settling 25 cases outside the class worth a combined $4.7 million, according to testimony.)

Bonar said she laid the "building blocks" for the settlement by providing documents to the other lawyers and by bringing clients to the class. But Steinberg said she never passed on anything other than old newspaper articles and that she undermined the class action by settling cases on the side with individual clients.

Bonar denied that was improper, but McGinnis said several times from the bench that she violated ethics rules by doing so.

Bonar's credibility also seemed to be undercut when a plaintiff in the diocese case whom Bonar said she had referred to Chesley's firm said he had never talked to Bonar about the case.

The plaintiff, a Boone County elected official who has not been identified in the litigation, praised Chesley and Steinberg and said he had never seen them do anything unethical. "If we didn't have these two men none of us would have gotten any justice," the official testified.

Reporter Andrew Wolfson can be reached at (502) 582-7189, or awolfson@courier-journal.com